The Freeman Against State Capitalism

Article by Charles Johnson.


Bleeding-Heart Libertarians might find a great deal of potential interest in the upcoming month’s issue of The Freeman: Ideas on Liberty. I mention this partly for selfish (or at least self-promotional) reasons; one of the articles there — The Many Monopolies — is an article of mine. But if I’m glad that my article is in this month’s issue, it’s in no small part because I’m so honored to be sharing an issue with Kevin Carson’s remarkable cover story on Taylorism, Progressivism, and Rule by Experts, Sheldon Richman’s left-libertarian case against neoliberalism and the IMF, and book reviews by (BHL contributor) Gary Chartier and Carl Watner (a pioneer voluntaryist and a scholar of nonviolent resistance and the 19th century radical individualists). Tolle, lege.

My article on The Many Monopolies is closely related to the distinction I explored last week in “Libertarian Anticapitalism,” along with a bit of a puzzle about the libertarian tradition. Throughout the 20th century,1 American free marketeers overwhelmingly saw themselves, described themselves, and were described by others as defenders of “capitalism.” Now, I spent some time last week talking about one of the conceptual issues involved in that claim — whether “capitalism” is supposed to mean a free market, or an interventionist  pro-business political economy; or whether it’s supposed to refer to a social order in which economic affairs are dominated by a very particular complex of structures, motives and patterns of activity, in particular the wage-labor system or profit-dominated relationships. As I briefly mentioned at the time, 20th century libertarians, at least those who called themselves “pro-capitalist,” typically claimed to mean nothing more than the free market, pure and simple, by the term. But then they proceeded to identify free markets with corporate structures, wage-labor relationships, etc. that were capitalistic in one of the concrete senses — in order to defend actually-existing inequalities of wealth, common real-world business practices, workplace hierarchy, etc., as being (they claimed) the natural outcomes of private property and voluntary market exchange. Their picture of a free market, then, was capitalistic not only in the first sense but also in the third and fourth: something which would look, more or less, like business as usual, but even more so: bigger, stronger, faster, and no longer held back by government from pushing the corporate business model to the hilt.

In this respect, the 20th century libertarian infatuation with “capitalism” was almost a complete reversal from the traditional attitude of American libertarians. During the 19th century the compromising libertarians considered themselves “liberals,” and defined their priorities mainly in terms of the fight against mercantile privilege. Radical libertarians — individualist anarchists and mutualists,  like Benjamin Tucker, Lysander Spooner, Voltairine de Cleyre, Victor Yarros, Ezra and Angela Heywood, Gertrude Kelly, Stephen Pearl Andrews, Dyer Lum, et al. — were supporters and participants in the abolition movement, the first-wave feminist movement, and the organized labor movement.2 Tucker was one of the best-known defenders of free markets in late nineteenth-century America, and happily summarized his economic principles, in his classic “State Socialism and Anarchism: how far they agree, and wherein they differ” (1888), as “Absolute Free Trade . . . laissez-faire the universal rule.” And yet, in the same essay, he (like most of the individualist Anarchists) also repeatedly described his views as a form of “Anarchistic Socialism.” The combination could hardly be more unexpected, or more jarring, to the 20th century libertarian eye — how could laissez-faire, laissez-passer be the political program of an avowed “Socialist?” But we must remember that “Socialism” is as contested a term as “Capitalism;” and, remembering that, we must ask ourself what “socialism” could mean for a radical, free-market individualist like Tucker? Certainly not government control of industry, or political management of the means of production. Rather, what Tucker meant by “socialism” was workers’ control over the conditions of their own labor.3 This control, he argued, was denied, not by market processes or honestly-gained property, but rather by an interlocking set of political privileges to large-scale, incumbent capitalists — the Four Monopolies, and the artificial inequalities of wealth and bargaining power those monopolies fostered. For Tucker, then, libertarianism was not a defense of business interests, but an attack on economic privilege, by kicking away the political privileges that propped it up, and dismantling monopolies by exposing them to competition from below.

Given this divergence between the 19th century libertarians and the 20th, one natural question to ask is which of them libertarians should take as our model in the 21st century. (Or should we put them both aside, and try something new?) But before the question can be fairly considered, we need to do some detail work, recovering and fleshing out an understanding of what the 19th century individualists’ position was. So in my article I explore Tucker’s Four Monopolies analysis of capitalism (meaning “capitalism” in the sense of the wage-labor system), and how the analysis might be applied to the economic statist quo that we see around us.

The crises laid at the feet of laissez faire are the crises of markets that are nothing if not fettered. When critics confront us with corporate malfeasance, structural poverty, or socioeconomic marginalization, we should be clear that market principles do not require defending big business at all costs, and that much of what our critics condemn results from government regulation and legal privileges. As a model for analyzing the political edge of corporate power and defending markets from the bottom up, we twenty-first-century libertarians might look to our nineteenth-century roots—to the insights of the American individualists, especially their most talented exponent, Benjamin Ricketson Tucker (1854–1939), editor of the free-market anarchist journal Liberty.

Conventional textbook treatments portray the American Gilded Age as one of relentless exploitation and economic laissez faire. But Tucker argued that the stereotypical features of capitalism in his day were products not of the market form, but of markets deformed by political privileges. Tucker did not use this terminology, but for the sake of analysis we might delineate four patterns of deformation that especially concerned him: captive markets, ratchet effects, concentration of ownership, and insulation of incumbents.

The analysis, the application of it to the present day, and the outlines of an argument for the analysis and the re-application, ensues.




  1. The “short 20th century,” that is. What I’m calling the “20th century” libertarian attitude towards capitalism took shape  mainly during the 1930s and 1940s, as radical libertarians like Albert Jay Nock and Frank Chodorov found themselves increasingly associated with the coalition now retroactively described as the “Old Right.” See for example Chodorov’s 1945 “Let’s Try Capitalism.” But before about 1917, the radical free marketeers in America were primarily associated with the Anarchist movement, and both considered themselves, and were considered, as red as Emma Goldman. In this respect the 1900s and 1910s were more or less a part of the late 19th century milieu, with World War I and the Wilson administration as a decisive break-point.
  2. Dyer Lum, for example, was an organizer for the Knights of Labor, the anarchist International Working People’s Association in Chicago, and, late in life, the AFL. Many of the Boston individualists first met through the meetings of the New England Labor Reform League. Andrews, Tucker, Spooner, Josiah Warren and William B. Greene were all members of the First International, before it came to be completely dominated by Marx and his followers.
  3. As Tucker put it, “the bottom claim of Socialism” as he understood it, is “that labor should be put in possession of its own.” Where the State Socialists and Marxists saw “in possession of its own” collectively, as something Labor is supposed to get, with the State or the Worker’s Council acting representatively to administer this collective property (allegedly) on behalf of the whole, Tucker thought of it distributively, with laborers gaining control over their product and its means of production, each for herself, or through such cooperative associations as individual workers might choose to form. Tucker’s view was not idiosyncratic: you can see much the same views expressed, explicitly, in the works of Anarchistic Socialists writing well before Marx’s rise to fame, e.g.  Pierre-Joseph Proudhon, Ernest Lesigne, Josiah Warren, et al.

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